by Bruce Hood
Bragging about wealth may be a signal of success but it runs the risk of generating malicious envy. So, you might predict that when inequality is visible, the wealthy would feel guiltier and be motivated to do something about it, like the Polynesian fishermen. In fact, the opposite is true. When wealthy people discover just how much better off they are than their neighbours, they are much less likely to reduce the imbalance. This counterintuitive effect was first observed by Nicholas Christakis, a Yale psychologist who created two virtual worlds of online citizens who lived in two different sets of ‘countries’.53 One set of citizens was randomly assigned to rich and poor roles within three societies with different levels of inequality as measured by the Gini coefficient. A Gini score of 0 per cent is perfectly egalitarian, with everyone on an equal footing. A score of 100 per cent would be a severely unequal society. Some of the world’s poorest countries (the Central African Republic, for example) have some of the world’s highest Gini coefficients (61 per cent), while some of the wealthiest (e.g. Denmark) have some of the lowest (29 per cent). Interestingly, Denmark operates a tall poppying code of conduct known as the ‘Law of Jante’ that emphasizes the virtues of being average and not thinking that you are better than others. (They also have the concept of hygge, which captures the enjoyment and contentment of simple things shared with other people – which partly explains why the Nordic countries top the league of the happiest nations. A few years back, hygge became a craze in other countries, with numerous bestselling books on the topic as well as a spike in sales of socks and candles. People were seeking the promise of happiness through hygge.) Another term, lagom, which translates from the Swedish to mean ‘just the right amount’, captures the Scandinavian countries’ preference to shun excessive consumption or ostentatious acts.
In Christakis’s virtual world, one society was set to a Gini coefficient of 0 per cent, another was set to 20 per cent (which is close to Scandinavian countries) and the third was set to 40 per cent (which corresponds to the US). One set of societies could ‘see’ the wealth of its neighbours, whereas the other set was blind to the wealth of its competitors. Christakis and his team then got the citizens to play repeated rounds of a co-operation game similar to the tragedy of the commons we described earlier, where ‘citizens’ could either opt in to contribute to the common wealth of the group, or defect and take advantage. The major factor that determined play was not the level of inequality but rather whether players could see each other’s wealth. When wealth wasn’t visible, the rich and poor converged towards more egalitarianism at around 16 per cent on the Gini scale. That’s a pretty co-operative society typical of Scandinavian countries, which may reflect an inherent bias, which is why, as we discovered earlier, Americans would prefer to live in Sweden when offered a choice of hypothetical wealth distributions. However, when wealth was visible people became as much as 50 per cent less co-operative, less friendly and less rich – regardless of the initial level of inequality. Moreover, when wealth was visible, the rich exploited their poor neighbours. Of course, unlike for the Polynesian fishermen, this was a virtual world so there were no real consequences of defection or exploitation. However, it would appear that, when it comes to economic inequality, ignorance is bliss. These experimental findings suggest that signalling wealth can backfire. Rather than generating admiration through benign envy, excessive visible wealth may generate malicious envy, stoking the fires of rebellion.
THE WEALTH OF NATIONS
After the Second World War several economies, most notably the US, experienced a marked increase in wealth, and yet, as observed by the economist Richard Easterlin, they did not seem to experience an increase in reported levels of happiness.54 As wealth rose, levels of happiness remained constant. This ‘Easterlin paradox’, first identified in the 1970s, has since been studied extensively in nations across the world, with mixed results. Both the UK and the US fit the general picture that increased income does not make you happier. Indeed, many indicators of mental well-being seem to show the reverse. Writing in the Financial Times in 2006, British economist Andrew Oswald criticized the Chancellor of the Exchequer, Gordon Brown, for pursuing a strategy of economic growth precisely because of the Easterlin paradox.55 Both the US and UK were experiencing increased wealth but also increased rates of depression, work-related stress and suicides. At the time, such was the concern that economic policies were generating unhappiness, that a group of respected academics produced a manifesto – ‘Guidelines for national indicators of subjective well-being and ill-being’ – identifying the importance of mental health as a priority over economic growth.56
The Easterlin paradox is still a contentious issue as the experts argue over the data. Both sides of the debate have evidence to support their positions. Each country differs on so many dimensions that a simple relationship between economics and psychological well-being is problematic. People are complex, and discovering the association between wealth and happiness is fraught with difficulties. Indeed, defining happiness is complicated. In 2010, the psychologist Daniel Kahneman and his economist colleague Angus Deaton published an analysis of subjective well-being and income in a sample of 450,000 US adults.57 They asked about happiness in terms of positive affect, not feeling blue and the number of stress-free days they had recently had. They also asked the respondents to rate their lives in terms of success on a scale of 0–10, with 0 being the ‘worst possible life for you’ and 10 the ‘best possible life for you’.
There were two basic findings. Life got better in terms of happiness with more money, up until around $75,000 of annual income; after that, happiness flattened out so that extra income made no difference. However, the second important finding was that individuals continued to feel that they are more successful on the ladder of life as their income increased. Clearly the link between wealth and happiness is only true up to a certain point, after which money does not have much effect. Poor people are not as content as richer people but, as Kahneman and Deaton conclude, high income buys life satisfaction but not happiness. In other words, we rate our lives as much better with more money, but we are not necessarily happier. Yet, most of us are still compelled to strive for greater financial success. We believe that being a success is measured by how far up the ladder we have climbed even if it doesn’t always make us happier.
If money can’t buy happiness, then maybe it’s because it is being spent on the wrong things. There is now a substantial body of research that indicates people gain greater satisfaction from spending money on experiences rather than possessions – the difference between ‘being’ versus ‘having’. Psychologist Tom Gilovich has shown that the benefits that people derive from experiential consumption such as holidays, concerts and meals out tend to last longer than the consumption of material possessions such as luxury items of clothing, jewellery and electronic gadgets.58 That satisfaction holds from both the anticipation of the experience as well as upon reflection.
One simple reason goes back to habituation again. The things we acquire often sit around accumulating dust, whereas memories are constantly reinterpreted and gilded in our minds. We are more willing to talk about our experiences than our recent material purchases, and where we see faults in our purchases we are much more inclined to reflect upon the positive side of experiences. We walk around with rose-tinted glasses when it comes to reminiscing about our trips rather than remembering how arduous or awful they really were. In one study of parents’ recollections of visits to Disneyland – ‘the happiest place on earth’ – the average experience was less than magical with long queues, cranky kids and hot weather. However, after time, the trip was considered much more fun and an opportunity for family bonding.59 As we noted earlier, the good old days are a product of bad memories.
The reason we are so easily fooled is that memories are not cast in stone but reconstructed with every retelling. The psychologist Elizabeth Loftus has shown that our memories are readily modified over time and with every recollection to the extent that, eve
ntually, we cannot tell reality from fantasy.60 This is because memories are stored in dynamic neural networks that code for multiple experiences and adjust their content over time and new events. And if we are retelling events to impress others, then they are subject to the ‘Pollyanna principle’.61 The name comes from the eponymous 1913 book by Eleanor Porter, who created a girl who could only see the best in every situation in her ‘Glad Game’. Today we would call it a positivity bias when it comes to evaluating memories. With this malleability, memories can easily take on positive embellishments in a bid to out-experience someone else’s anecdote. How often have you overheard dinner conversations where there is a competitive one-upmanship to outdo another’s experiences? ‘Oh, you must see Machu Picchu. It will blow your mind! It was the best trip we ever had.’
Where once exclusivity was the cachet for luxury items, so it also holds true for experiences. In retelling experiences, they become part of our identity and increase our social capital, the resources people accumulate through their relationships. Compared to material consumption, which tends to be a solitary affair, experiences by their nature tend to be social events involving other people. Through the social media platforms of Facebook and Instagram we can display just how amazing our experiences are. We may think that such information is simply sharing experiences, but in posting the best possible images we are in fact social peacocking again and generating envy in others. Whether that envy is benign or malicious really comes down to whether our friends and followers think we deserve the experiences.
In seeking happiness, it would be an over-generalization to say that we should simply spend more on experiences, because consumers are only really happy if they buy experiences that fit with their personality type. An extravert is going to enjoy spending money on parties and restaurants more than an introvert who finds such experiences challenging.62 This is why an analysis of 76,000 bank transactions reveals that introverts are happier buying books rather than visiting bars.63 We need to look at our personal values to make the right choices of what we want.
Seeking experiences sounds like a carefree, non-materialistic existence in the pursuit of hedonism without the hassle of mortgages and commitment. In reality, these experience seekers are often affluent individuals who have the wealth to enjoy bohemian lifestyles, out-sourcing material requirements as needed. It is not a model for life that will work for all. A recent large-scale analysis of purchasing happiness shows that while the rich do enjoy experiential purchases more than materialistic ones, the opposite is true for those who are less well off.64 This is because those with access to abundant resources can afford to indulge themselves with self-improvement.
Moreover, the notion that experiential consumerism is more environmentally friendly than material consumerism requires closer scrutiny. For example, travel is on the increase. For the past five years, the UK has experienced a year-on-year increase in travel of between 5 and 10 per cent to and from the British Isles by visitors and residents.65 Airbnb, the house-renting online platform, has increased travel – with the associated carbon footprint that entails – rather than reducing it. The fact that growing numbers of Western millennials cannot afford mortgages and move more often has been given as a reason for increased expenditure on experiences. According to Forbes magazine, 78 per cent of millennials, compared to 59 per cent of baby boomers, would rather pay for an experience than material goods.66 If you are laden down with stuff, moving is a hassle. Yet the shift to experiences does not necessarily mean a reduction in consumption. Just think about how wasteful and inefficient hotels are, in terms of providing cleaning, fresh linen, disposable toiletries, food, air conditioning and all the other luxuries that we have come to expect in our travels but not in our homes. To indulge travellers, 2 million bars of soap are thrown away every day in US hotels and 50 per cent of waste in the hospitality industry is food waste, at an annual cost of $218 billion.67
Global tourism is a $1.2 trillion industry, and it’s growing every year. Previous estimates of the tourism industry’s carbon footprint put it at between 2.5 and 3 per cent of total global carbon dioxide emissions. However, a recent study of tourism in 160 countries found that, between 2009 and 2013, tourism’s global carbon footprint had increased four times more than previously estimated, accounting for about 8 per cent of global greenhouse gas emissions.68 Transport, shopping and food were the most significant contributors and the majority of this footprint was made by the wealthiest countries. As the authors conclude, the rapid increase in tourism demand is effectively outstripping our goals of decarbonization of tourism-related activities.
We need to find better ways to occupy our time and spend our limited resources. While we may think that we will be more satisfied with our lives if we own more stuff, research into life satisfaction and happiness reveals that, once we have achieved a moderate income, we are no happier with more possessions. Whether it is through our purchases of things or experiences, we are still seeking something to show that we are different. We are still trying to signal our status and project who we are.
6
We Are What We Own
THE EXTENDED SELF
Nusrat Durrani looks like a rock star. When I met him in 2017, he was a senior executive at MTV, but even if you did not know that, you probably would have guessed he came from the media world just by looking at him. He wears designer clothes, most often black or leather, over his slight frame, has an abundance of jet-black long hair and wears tinted glasses – an Indian Joey Ramone. Even among the colourful gathering of fashionistas, futurists, venture capitalists and entrepreneurs at the Kinnernet gathering in Venice where we met, you could tell that Nusrat was super cool. Except that, when we met, he was far from cool.
Nusrat had just arrived from Rome where, the evening before, he had been robbed in a restaurant by opportunistic thieves who had taken his bag of personal items. With around 40 per cent unemployment in Rome, petty crime and theft from tourists has become a main source of income for the poor. It was an inconvenience but Nusrat is a relatively wealthy man. He has the luxury of time and resources to travel the world. These possessions could be easily replaced. At first, he was relaxed about the incident and seemed calm and collected. But over the next few days of the meeting, he became increasingly agitated about it. Like many unwelcomed intrusions in life, theft generates initial bewilderment followed by a growing sense of rage.
Nusrat’s reaction is common. We are often surprised by how much theft upsets us, no matter how well off we are or how cool and calm we would wish to remain. This is because possessions are an extension of our selves. When they are taken without permission, it is equivalent to a violation of our person. Household burglary is particularly distressing as it includes an invasion of our territory where we usually feel most safe. Almost two-thirds of those burgled in the UK are extremely upset, experiencing a variety of symptoms including nausea, anxiety, crying, shaking and ruminating well after the event. Insurance companies report that it takes around eight months to feel safe again, and one in eight never recover emotionally.1 It is not just the financial loss that distresses us; rather, it is more an intense sense of infringement. Someone has come into our world uninvited and undermined our control.
Loss can also be upsetting when we are forced to give up possessions that we would rather keep. It is this reluctance to let go which is one of the more revealing aspects about humans and their relationship with possessions. Consider the storage unit industry that took off in the late 1960s, after the decades of post-war consumerism. Every year more of us are putting our stuff in storage rather than getting rid of it. Currently, there are more self-storage facilities in the US than there are branches of McDonald’s, even though 65 per cent of storage users also have garages.2 Many garages no longer contain cars but rather the overspill of possessions that we can no longer keep in the house. Why are we reluctant to relinquish our things, and why do we keep lock-ups full of personal possessions that are of little value? Why do we have thi
s peculiar emotional dependency on our possessions?
The reason is that we are what we own. In 1890, the father of North American psychology, William James, wrote how the self was defined by what we can claim ownership over:
In its widest possible sense, however, a man’s Self is the sum total of all that he CAN call his, not only his body and his psychic powers, but his clothes and his house, his wife and children, his ancestors and friends, his reputation and works, his lands, and yacht and bank-account. All these things give him the same emotions. If they wax and prosper, he feels triumphant; if they dwindle and die away, he feels cast down, – not necessarily in the same degree for each thing, but in much the same way for all.3
James is describing what psychologists call ‘self-construal’, the way we think about who we are as well as the emotional consequences of loss, which reveals the special relationship we have with our possessions. It is not particularly surprising that we consider our bodies and minds as part of our self. After all, who else can claim them? However, many material things on the list are not unique to us and could be owned by another. Houses, lands and yachts are properties that we acquire. It is striking then that losing them can affect us so personally.
Many thinkers have considered the intrinsic link we have to our material possessions. Plato famously had little regard for the material world and thought we should aspire to higher, immaterial notions. He argued that collective ownership was necessary to promote pursuit of the common interest, and to avoid the social divisiveness of private property that leads to inequality and theft. His student Aristotle, always one to argue with his mentor, was a little more grounded, and emphasized the importance of studying the material world. He thought private ownership promoted prudence and responsibility but noted how we tend to envy and be jealous of others because of ownership. Two thousand years later, the French philosopher Jean-Paul Sartre maintained that the only reason we want to own is to enhance our sense of self, and the only way we can know who we are is to observe what we have – almost as if we need to externalize our self through our possessions. Our acquisitions are tangible markers of our success. Like the study of wealth in the US, we may not get much happier after reaching an income of $75,000 a year, but we are more self-assured that we are successful if we can see our possessions. Not only do we signal our self to others through our possessions, our possessions signal back to us who we are.